I got the following information from http://www.facebook.com/ubank
It's Friday, and it's a good Friday for saving. We've increased the UBank USaver rate to 5.95%pa including ASP Savings Bonus (5.85%pa without) effective Fri 19 March. Now there's some news that'll get your weekend off to a good start. Speak soon, Monty H
Referrer and referee each receive $20 after referee makes 5 settled card purchases within 30 days.
Great news Monty !
How about the Term Deposits?You are SADLY lacking behind on your measly rates…
I have a lot of cash coming to me soon and unfortunately I CAN'T invest with you as your Term Deposits are the worst around…
Soon to be EX Bridgestone Employee………
I'm curious… in a market where interest rates are rising, why would anyone opt for a term deposit over an at-call account? Rarely have I ever seen a term deposit rate significantly exceed the at-call rate of these high-interest internet accounts, plus term deposits are more restrictive. I'm not having a go at macfanboy — but genuinely curious.
+1 for UBank though. We were forever doing the bank account shuffle: chasing the highest interest rate with RaboPlus, ME Bank, etc until UBank started up.
Sure nobody would invest in a long term Term Deposit.
But a 6 month or 1 year term deposit should be ok.
When you have a large amount to invest, an extra 0.5% can mean a lot of money…
Plus why would Ubank have term deposits lower than their everyday usaver account…
1 month 3.36% p.a.
3 months 5.76% p.a.
6 months 6.11% p.a.
9 months 5.66% p.a.
12 months 6.01% p.a.
Only the 6 and 12 month are better…
Yes, you're right. I admit I had only been considering our situation of a few thousand dollars… so if you are investing, say, $100k then an extra 0.5% will be another $500 in interest for the year.
@vocadata: But interest are paid monthly so you actually get more than you think in the usaver because of the compound effect. I wouldn't put it in term deposit now, another rate rise look likely in the next 6 months.
@kcyw: Good point! An APR of 5.95% actually comes out as an APY of 6.115% so in this case the at-call account beats the 6-month term deposit.
@vocadata: Which proves my point exactly.
I wish that Ubank's 6 month term deposit was better so I could put it in there, instead of moving it elsewhere.
My experience with Ubank has all been positive and I would hate to move the money but as I will be unemployed for the first time in over 30 years I need to make as much money as possible from my pay out.
I use term deposits to defer when I have to pay tax on the earnings.
For example, if I open a 12 month term deposit in July 2010, I would not have to pay income tax on the earnings until November 2012, because the interest will be paid in July 2011, which is part of the 2011-2012 financial year. This means I can earn interest on my tax liabilities for well over a year!
Also, if you know in the future you may earn less (maternity leave for example), you can ensure that you receive your interest on maturity during this time, which minimizes how much marginal tax you pay.
Thanks, that's useful to know.
awesome post!
Great point of view. I never considered that strategy.
The situation certainly does arise when it is worth getting a term deposit in a rising market.
Remember term deposit rates are not just reflective of the future RBA cash rate, they are also reflective of how desperate banks are for cash.
When Westpac was receiving all the bad press after raising more than the RBA rate (remember the banana smoothies video??) they also raised their 12 month Term Deposit rate to 6.8% because they were extremely desperate for funds. This was a rare opportunity and was almost 2x the cash rate at the time. I got suncorp to beat it as per their policy and got 7.05% on a 12 month term deposit. So I jumped in and I will almost certainly beat the ubank rate on average over the 12 month period despite interest rates being on the raise in that time.
How about 5 year term deposit with Westpac…+ 0.25% suncorp = 8.25%
@cuteduck: you would be laughing if you were an expat living and earning overseas. Invest back home at 8.25% guaranteed and hardly pay any tax on it (eg you would be under the tax free threshold because your total Australian taxable earnings would be low)
Where does it say that Suncorp will beat other bank's rates? (so that I can use it). I can't seem to find anything about this policy on their site. http://www.suncorp.com.au/suncorp/personal/term_deposits/sta…
@Lenneth: It has been advertised a few times in the last 6 months in newspapers etc, but never advertised prominently on their website front page. They had stacks of flyers for it in the Adelaide branch though when I checked.
I reckon if you are serious just give them a call and ask.
Yeah I rang em yesterday with the CITIBANK 5.88% update and they said they would pass it on!
BINGO! 5.95%
Got to love em!
Citibank is 5.88%, so UBank still behind with their 5.85%
hopefully, they will match the citibank's interest rate. I don't think it is in their list.
Woo.. u have done it again..!!! +1
Signed up for this last night just for another savings account. Thanks for the heads up!
By the way that Citibank rate only lasts 6 months then goes down, so no good.
Has anyone that participates in the ASP to get the bonus 0.1% interest seen their interest rate rise to 5.95% yet? Any changes to the interest rate are usually noted on the transaction history but I haven't seen this latest update yet on mine.
Cheers!
On 12 March 2010, my online statement indicates "PLEASE NOTE YOUR CURRENT CREDIT INTEREST RATE IS: 5.85% P.A." to which they add 0.1%.
Incidentally UBank's Rate Assurance ends on 31 March 2010. I hope they decide to continue it, as it is definitely a winner.
Thanks for the info.